Australian Government Bonds…even lower!

Since August the Australian Government Bond yield curve has dropped massively indicating the lower expectation of interest rates and the deteriorating outlook for our economy. I’ve voiced my increasingly bearish view of the Eurozone situation so I won’t go on any further about so I’ll mention the new addition to my yield curve…the new 2027 Australian Government bond. It was issued near the end of October and as the chart shows it is trading at around 4.4%!!! A near 16 year government bond trading below the cash rate…mmmm, cash rates are coming down and clearly I’m not the only one bearish about our economy, the market is too.